Cement Demand Expected to Rise 6.5-7.5% in FY26: Crisil
Crisil projects a 6.5-7.5% increase in cement demand for FY26, driven by a recovery in the real estate sector and increased government spending on infrastructure projects.
Cement DemandReal EstateInfrastructureGovernment SpendingCrisilReal EstateApr 22, 2025
Weak state government spending in the first half of the fiscal year had previously slowed the pace of project execution. However, the second half is anticipated to see a significant uptick in activity, driven by a revival in the construction sector and increased funding for infrastructure projects. This is expected to provide a much-needed boost to the cement industry, which has faced challenges due to economic uncertainties and a slowdown in the real estate market.
The real estate sector, a major consumer of cement, has shown signs of improvement. Developments in housing, commercial, and industrial projects are gaining momentum, contributing to the overall rise in cement demand. Additionally, the government's push for urbanization and the launch of various housing schemes have further invigorated the market. These initiatives are expected to stimulate demand and support the growth of the cement industry in the coming years.
Crisil's analysis also highlights the role of large-scale infrastructure projects in driving cement consumption. The launch of projects such as the Bharatmala Pariyojana, Sagarmala, and the Smart Cities Mission has created a substantial demand for cement. These initiatives, coupled with the government's focus on improving connectivity and modernizing urban infrastructure, are expected to sustain the growth momentum.
Moreover, the cement industry is likely to benefit from the government's emphasis on sustainable and green building practices. The increasing adoption of green building materials and the push for energy-efficient construction are expected to create new opportunities for cement manufacturers. Companies that can innovate and offer eco-friendly solutions are likely to gain a competitive edge in the market.
However, the industry faces some challenges. The volatility in raw material prices, such as coal and petcoke, could impact production costs. Additionally, the availability of skilled labor and the need for continuous technological advancements are critical issues that need to be addressed to ensure sustained growth.
In conclusion, the Indian cement industry is on the path to recovery, with demand expected to rise significantly in FY26. The recovery of the real estate sector, increased government spending on infrastructure, and the focus on sustainable practices are key drivers of this growth. Cement manufacturers that can adapt to these changing dynamics and innovate will be well-positioned to capitalize on the opportunities ahead.
Crisil, a leading credit rating and research agency, provides valuable insights and analysis for various industries. Their projections and reports are widely regarded as reliable indicators of market trends and economic conditions. For more information, visit their official website or contact their customer support team.
Frequently Asked Questions
What is the projected growth in cement demand for FY26?
Crisil projects a 6.5-7.5% growth in cement demand for FY26.
What factors are driving the increase in cement demand?
The increase in cement demand is driven by a recovery in the real estate sector and increased government spending on infrastructure projects.
How is the real estate market contributing to the growth in cement demand?
The real estate market is contributing to the growth in cement demand through the revival of housing, commercial, and industrial projects.
Which government initiatives are expected to boost cement demand?
Government initiatives such as the Bharatmala Pariyojana, Sagarmala, and the Smart Cities Mission are expected to boost cement demand.
What challenges does the cement industry face despite the positive outlook?
The cement industry faces challenges such as volatility in raw material prices, availability of skilled labor, and the need for continuous technological advancements.
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